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Top ETF Stories of March

Sanghamitra Saha
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Despite recessionary fears, the month of March went well for Wall Street. Global growth worries, Brexit drama and overvaluation concerns (after a robust first quarter) resulted in steep selloffs in the middle of the month while progress in US-China trade talks and upbeat factory activity in China gave the much-needed boost to the markets at the close of the month.

Overall, SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust QQQ added about 1.6% and 3.7% in the past month (as of Mar 29, 2019) while SPDR Dow Jones Industrial Average ETF DIA lost around 0.07%.

Dovish Fed & Treasury Rally

Unlike last year, the Fed has been pretty dovish from the start of this year. The central bank has pledged to take a patient stance toward the future rate outlook. Investors should note that in March, the Fed lowered real GDP growth forecasts for 2019 and 2020. Federal funds rate projections for 2019 were trimmed to 2.4% from 2.9% while the same for 2020 and 2021 was cut to 2.6% from 3.1%.

While the Fed’s dovishness triggered a stock market rally at the start of the quarter, recessionary fears boosted the appeal for safe-haven treasuries starting mid-month. Investors should note that PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund ZROZ has added 7.6% in the past month (read: Top and Flop ETF Areas of March).

Improvement in US-China Trade Talks

There have been signs of improvement in China’s struggling factory activity while U.S.-China trade talks have also been seemingly in the right direction. The dual tailwinds helped charge up the global markets at the end of the month. Industrial metals also got a lift as China is a major consumer of industrial metals. Invesco DB Base Metals Fund DBB gained 3.3% in the month (read: U.S.-China Trade Optimism Boosts These ETFs).

LYFT IPO a Smashing Hit: IPO ETF on the Radar

The number two U.S. ride-hailing firm Lyft made a debut on Nasdaq on Mar 29 under the symbol “LYFT.”  The company was valued at as much as $30 billion as shares rose about 20% on its market debut.

Per market watchers, Lyft IPO’s success will boost other tech IPO enthusiasts like Uber, Pinterest, Airbnb and Slack in the coming days, greatly benefiting the IPO market and the fund Renaissance IPO ETF IPO (read: Lyft IPO May Lift These ETFs).

India ETFs Rally

Though India ETFs commenced the year on a soft note, it gained steam in March following a wave of optimism around the re-election of prime minister Narendra Modi’s party in the upcoming general elections, and hopes of further economic reforms and easing of monetary policy. Additionally, the Fed’s dovish outlook on future rates hike and growth projection cuts for 2019, and the European Central Bank’s dull outlook on Eurozone’s economy have renewed optimism in this emerging market, inviting large inflows into the country (read: Here's Why India ETFs Are Soaring).

Consequently, India ETFs are the clear winners of March with small-caps leading the rally. Columbia India Small Cap Fund SCIN, VanEck Vectors India Small-Cap Index ETF SCIF and iShares MSCI India Small-Cap ETF SMIN added about 17.4%, 16.1% and 13.7%, respectively.

Brexit Drama Continues

Members of the British Parliament turned down prime minister Theresa May’s EU withdrawal agreement for the third time on Mar 29, the day Britain was scheduled to leave the EU. Today, MPs will participate in a second round of votes on alternative Brexit proposals.

Notably, Apr 12 is the final date for the U.K. to reach a conclusion whether to take part in elections for the European Parliament, scheduled May 23-26. Invesco CurrencyShares British Pound Sterling Trust FXB lost 2.1% past month and iShares MSCI United Kingdom ETF EWU advanced only 0.9%.

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SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports
 
VanEck Vectors India Small-Cap Index ETF (SCIF): ETF Research Reports
 
iShares MSCI India Small-Cap ETF (SMIN): ETF Research Reports
 
PIMCO 25+ Year Zero Coupon U.S. Treasury Index ETF (ZROZ): ETF Research Reports
 
Columbia India Small Cap ETF (SCIN): ETF Research Reports
 
Invesco DB Base Metals Fund (DBB): ETF Research Reports
 
Renaissance IPO ETF (IPO): ETF Research Reports
 
iShares MSCI United Kingdom ETF (EWU): ETF Research Reports
 
Invesco CurrencyShares British Pound Sterling Trust (FXB): ETF Research Reports
 
Invesco QQQ (QQQ): ETF Research Reports
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
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